This is not financial advice. You should seek independent financial advice before making changes to your superannuation fund.
Due to the impacts of Coronavirus, rideshare drivers now have access to 20,000 dollars from their superannuation account. Normally, you would have to wait until you’re 65 before accessing your superannuation. You do not need to pay tax on the amounts released, nor will it have any effect on Centrelink or Veteran’s Affairs entitlements.
You must satisfy any one or more of the following to be eligible:
- You are unemployed; or
- You’re eligible to receive the Jobkeeper or Jobseeker payment, Youth Allowance for Jobseekers, Parenting Payment (single or partnered), special benefit or farm household allowance; or
- On or after 1 January 2020:
- You were made redundant; or
- Your working hours were reduced by 20 per cent or more; or
- If you’re a sole trader – your business was suspended or there was a reduction in your turnover of 20 per cent or more.
Rideshare drivers are sole traders, if your income has decreased by 20% or more, then you should be eligible to access your Super.
Access $10,000 of your superannuation balance (tax free) in the 2019-20 and 2020-21 financial years. That is a total of $20,000 over the two financial years tax free and you will not need to reported this your BAS.
With money available in multiple superannuation accounts, you can withdraw from more than one account as long as the total amount you withdraw doesn’t exceed the $10,000 threshold for one financial year. For example, you could withdraw $4,000 from one super fund then another $6,000 from another super fund in the one financial year.
Normally, every cent a rideshare driver earns attracts GST but the good news is, the income you receive from your superannuation will not be reported in your BAS and does not attract GST. You will not need to enter this income in the Rideshare Tax app.
Temporary Visa Holders
If you’re a temporary visa holder, including international students and temporary skilled visa holders, then you can also apply for early access to your super fund for up to $10,000 until 30th June 2020.
To apply for the early release as a temporary resident, you must satisfy at least one of the following requirements:
- You hold a student visa that you have held for 12 months or more and you are unable to meet immediate living expenses.
- You are a temporary skilled work visa holder, your working hours have reduced to zero and you remain engaged with your employer.
- You are a temporary resident visa holder (excluding student or skilled worker visas) and you cannot meet immediate living expenses.
More information on Temporary visa holders is available here.
Applications officially opened on the 20th April 2020. Once you submit your application, you should receive your payment in a week within 5 days of application.
The second payment for the 2021 financial year will be subject to application date.
From the 20th April 2020, applications are to be made directly to the ATO via the MyGov website.
Once your application is successful, the ATO will advise your superfund to release the funds directly to you. Just make sure that your contact and banking details with your superfund are up-to-date.
You will not be required to attach evidence to support your application; however, you should keep a record of your documents in case you are asked to present this information one day.
Further information is available on the ATO website: www.ato.gov.au
Withdrawing your superannuation will affect your super balance and may affect your future retirement income. It may also affect your income protection insurance, life / total permanent disability insurance cover.
If your account is fully drawn or if the balance is below $6,000, then you wont have insurance available.
Please seek financial advice before withdrawing funds from your super. It is important to understand that accessing your super early will reduce your super balance and may affect your future retirement income.
7News illustrate a great video on the long term implications of accessing your super early. Watch the video here
Other helpful information:
Read our blog on Income Support for Uber, Rideshare and Food Delivery Drivers for more information on the Jobkeeper and Jobseeker payments.
If you have any questions, please type in the comments below.